N.Y. needs a real raise

Our opinion: A deal on minimum wage doesn’t bring low-income workers to where they should be, and misses the benefits a better wage would bring for the state.

Phasing in a minimum wage increase has such a reasonable ring to it — until you run the numbers. Then you realize that a deal among state leaders would force workers to wait until 2016 for a wage that isn’t particularly adequate in 2013.

To present this deal as a fair and necessary compromise — as Gov. Andrew Cuomo and Senate Independent Democratic Conference Leader Jeff Klein appear poised to do — would be a distortion of reality. This moment is a test — of Mr. Cuomo’s and Mr. Klein’s commitment to New York’s workers and to the progressive agenda they claim to stand for.

The reality is that the minimum wage has eroded over the last four decades. Today it is worth about two-thirds of what it was at its peak in the early 1970s.

The increase Mr. Cuomo and legislative leaders are talking about for next year, from $7.25 an hour to $8, would still have nearly 30 percent less buying power than it did a generation ago. It would take until 2016 to reach $9, the amount that the Assembly would more sensibly implement next year.

This is all necessary, New Yorkers are supposed to believe, to get the consent of Senate Republican Leader Dean Skelos to raise the minimum wage at all. Under the arrangement by which Republicans and the IDC formed a majority coalition in the Senate, bills can’t get to the floor unless both Mr. Skelos and Mr. Klein agree.

But Mr. Klein’s hands are hardly tied. If the five members of his IDC joined with fellow Democrats, they would surely have enough votes to pass a better wage bill.

Yes, Mr. Klein would lose his power. But if his power-sharing deal with the GOP comes at the expense of such a key goal as a more decent minimum wage, Mr. Klein and his colleagues need to ask themselves just what this arrangement is doing for the people they serve.

Likewise, Mr. Cuomo needs to reaffirm what he himself wrote on these pages three months ago: that his support for any legislator — and by extension the IDC’s alliance with the GOP — is conditioned on their support of a progressive agenda, including a better minimum wage. It would be disingenuous of Mr. Cuomo to suggest that a clearly inadequate increase passes his litmus test.

This isn’t just about minimum wage. It’s about New York’s economy, too. People who are low on the pay scale spend what they make, right in their communities. We all benefit.

Further, as opponents of an increase have noted, raising the minimum also puts pressure on employers to raise pay for people who make above that threshold. So this would help many more workers. And that’s important in New York, which stands out, according to the Census Bureau, as the state with the worst income inequality in America.

Turning that around will surely take more than just an increase in the minimum wage. But it would be a start. And it can be, if Mr. Cuomo’s agenda is about more than show, and if Mr. Klein and his colleagues are about more than the trappings of power.

8 Responses

Where do the employers that feel this so called pressure to raise pay on staff below and slightly above the threshold supposed to get the funds for the increases? do they get it from the magic money tree or do they raise prices. Simple question.

As with the magical thinking that allowed progressives to believe that health care can be provided to an additional 40 million people while at the same time reducing costs, this editorial believes that the laws of supply and demand are suspended when it comes to increasing wages. As has been the case with all if its editorials on the issue, no mention is made by the TU of the very real and predictable consequences of increasing the cost of labor — such as the natural, dampening effect it has on the demand for such services.

Does raising the cost of labor provide an incentive or a disincentive to employers to hire? The answer is rather obvious. And the groups most affected are the ones in need of the most help – small businesses and youth, especially African-Americans.

In what is at best a very sluggish economy, increasing the minimum wage will certainly depress hiring by small businesses who are already struggling to survive. And why would they hire young, inexperienced, entry-level workers under these conditions?

The unemployment rate for all those between the ages of 16-19 is 25.1% with only 34.7% actually participating in the workforce. The figures for African-Americans 16-19 are horrible: their unemployment rate is a staggering 43.1% (up over 10% in the past year) with a paltry workforce participation rate of 27.4%.

Is there really anyone who can make the case that this situation will improve when the government increases the cost of hiring this population? But it’s conservatives and Republicans who lack compassion, right?

Higher minimum wage = less desire for employers to hire more people. It’ll be good for those already in a minimum wage job, but probably a bad thing for all those who are jobless. I could be wrong, but that just seems to be the most logical outcome. Could also cause more layoffs.. In my opinion, the cons outweigh the pros when it comes to increasing minimum wage.

So, raise the minimum wage quickly…that’s the suggestion? Raise it to what? If not $8, then $9. That’s not enough? Perhaps $12?
Where do you think this higher wage comes from…the businesses who do the hiring. The minimum wage was not and is not intended to be a spring-board to the middle class. That takes work, hard work. It takes an education and work ethic. Handing out higher wages like candy, par for the course for a “progressive agenda”, does not improve the economy…but does push NY even farther down the road of having the least friendly place to do business.
I can support an increase of the wage…but lets keep it real.

Minimum wage is just an inflationary measure that sends jobs elsewhere. If you have to pay your people 15% more to make the product common sense tells you that you must charge 15% more to sell the product.

Raise the minimum wage to $500 per hour. That way, if someone works a 40 hour week for 50 weeks of the year, at minimum wage, that worker will be paid $1,000,000! Poverty is wiped out! Tax revenues grow!

Of course, that burger that used to cost 1 dollar is going to be a whole lot more expensive, but, we would be a nation of millionaires!

The devil is in the details. What the TU ignores is the composition of the minimum wage workforce. According to the Bureau of Labor Statistics, in 2010 there were 4.3 million employees who earned at or less than the minimum wage. Of these 1/2 were under the age of 25. Don’t have the statistics, but I woluld bet the majority of these under 25s are not paying for rent, food, etc. as they live with their parents. In addition 1/2 of those at or below minimum wage work in the restaurant/food service industry. The minimum wage is supplemented by tips/commissions that increase overall earnings to above the minimum wage level. So how many key bread winners are actually trying to get by on a minimum wage? Also according to the BLS, the percentage of hourly workers earning at or below the minimum wage has declined to 6.0% from 13.4% in 1979, the first year data were collected. So what the TU wishes will increase the cost of hiring a minimum wage employee by 24% (including employers share of FICA) and will force the employer to raise wages of existing employees. So the overall cost is significantly higher than the TU estimates. And as mentioned previously, it seems counterintuitive to raise the cost of hiring someone in a group that already has a 25% unemployment rate.